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Costco & James D. Sinegal A new Vision and Morality in Business

Costco is criticized for treating employees and customers well.
What are the implications for the future?
NOTE - This article is just to draw attention to what I consider a key issue affecting the working class heros of the United States. I am not an investigative reporter - that work was already done. I'm just giving you a place to start looking

On a camping trip at the Oregon Coast I was listening to a Public Radio show called "Talk of the Nation" I heard something that I found almost impossible to believe. James D. Sinegal was critized for the excellent pay and benefits the Costco Employees receive. Now I've shopped at Costco and Sam's Clubs/Walmart and I can tell you there is a real difference. Investors are discouraged from buying stock in Costco and I know the signal being sent is a wrong one for the U.S.A. If you wondered why Enron, World Com, and others had continued to gouge customers and employees and other companies still do look at what Bill Dreher, a retailing analyst with Deutsche Bank Securities Inc. told The Wall Street Journal. While he critized Sinegal and Costco for over generous employee treatment a female analyst on Talk of the Nation criticized Costco and Sinegal for treating customers too well and should raise prices as well.

The Saint Louis Post-Dispatch published this article

CLASS AND SOCIETY: Let the warehouse war begin
By Kevin Horrigan

"Costco does $795 in sales for every square foot of retail space in its warehouse stores, compared with $516 per square foot at Sam's Club stores. Costco makes $13,647 in profits for each of its 68,000 full-time employees. Sam's Club makes $2,600 less than that for each of its 102,000 employees.

So how did Wall Street react to last quarter's good news? By bidding Costco shares down by 4 percent. Reason: Wall Street figures Sinegal is too darned nice to his employees - paying them living wages, covering 92 percent of their health care costs, giving them generous vacation and leave benefits and, in general, treating them like human beings. If only Jim Sinegal would take a page from Sam Walton, Wall Street figures, his company would be doing even better.

"From the perspective of investors, Costco's benefits are overly generous," Bill Dreher, a retailing analyst with Deutsche Bank Securities Inc. told The Wall Street Journal. "Public companies need to care for shareholders first. Costco runs its business like it was a private company."

Another article at a web site nicely called "the Church of the customer shows a graphic that shows the difference between Walmart and Costco on the employee benefits given

Click here

For anyone who wants a real eye opener read this excerpt from

The New York Times
April 4, 2004
Two Pay Packages, Two Different Galaxies By GRETCHEN MORGENSON

"A 2000 survey by Towers Perrin, the consulting firm, found that the pay of chief executives, on average, was 531 times that of their lowest-paid rank-and-file workers. But Mr. Sinegal's salary is less than 10 times that earned by his company's top hourly employees and roughly double the salary of a Costco warehouse manager, he said. "But bear in mind I have been rewarded by the stock," he said. "I rejected my bonus because we had a couple of years where we hadn't performed up to our standards. We were more profitable than the year before, but we didn't hit the standards we had set for ourselves, so we didn't think we were entitled."

Bravo Mr. Sinegal

homepage: homepage: http://vacatingmymind.blogspot.com/

hubba, hubba 20.Jul.2004 16:30

proud american

yeah, why shouldn't costco prostitutes get paid well? industry rapes and employees trick it out. if you don't think america is a hot # than find some other planet to live on , 'cause we're taking over, see.

Real Fact #352 20.Jul.2004 17:26

Costco still sucks

Costco contracts with prison labor, the only slave labor legal in the U.S., which undermines the salaries and employment opportunities for people not in prison.

is costco still selling 20.Jul.2004 18:32

skave bananas

from Ecuador? And those giant muffins with 500 calories of crap in them?

Shop wisely and locally; don't buy this shit.

One has to start somewhere 21.Jul.2004 06:17

Costco is better

For those who don't or can't boycott corporations, COSTCO is one of the leaders in employee benefits.
Sad to say when compared to Walmart and other slave-driven hell holes at least Costco management does not believe the end justifies the means. The employees are paid a decent enough salary on 40 hours a week to purchase a home for themselves and their families and they are given weekend evenings off to spend with friends and family. Profit is not the only consideration for management at Costco. Employees are treated better and therefore perform better. Wall Street doesn't want American workers to have such examples to influence them. Wall Street prefers the Walmart model.

think like a slave act like a slave 22.Jul.2004 10:54

choose your master

a house, a 40hr work week. good slave, stay in line, or better yet fight to keep it. good slave.

Does Costco Really Take Care Of Their Employees,I Beg To Differ 04.Aug.2004 15:15

Renee E. Stagg res9464@lausd.k12.ca.us

Well I'm an exception to the article,I had been an Employee of Costco Wholesale
from 11/21/86-02/21/03.Soon after transfering to the Tustin,Ca.location in March 2002,I became injured,in the time for Workers Comp.to make a decision the
Warehouse Mgr.decided that he didn't have any work I do with the limitations my
Doctor gave(forced to use personal insurance,to maintain treatment).Intern he had a Manager call and tell me not to return to work,that I needed to take a leave.
(mind you no decision from WC yet)shortly after being off,I received paperwork from HR,telling me benefits would stop,I then would have to pay the premium.I asked them to call Ron Hanstien,to see if he would give me some type of work to
not have benefits stop as well as maintaining care to heal from the injury...His
response was he did what he was supposed to,and there wasn't anything for me.
Wow,Shock that a company known for TAKING CARE OF ITS EMPLOYEES!!!this is what I
GET after 16years of service.Needless to say He Terminated me for not extending
my Leave Of Absence...How could I without any Health Benefit,let alone WC or SDI
to pay A Insurance Premium...I contacted the Regional President,he said he would
get back to me,he never did.I wrote A letter,got phone tags and comments from one
of the Labor/Contract personal who told me he did it all wrong,but never offered me my JOB BACK...finally I sent the letter and called James D.Sinegal,but his assistant DIVERTED my information back to the person I dealt with for 9months and nothing was ever resolved...thats just a little of my story...Hows that for a company known for being criticized for treating their employees to well?? not me.
Maybe you can help me get a little bit of Justice,Humanity,My LIFE BACK...love to
hear back from you,and tell you how everything has fallen apart.Thank You for reading my story.How do you fight without resources or money,and they're a
MulitiMillion Dollar Company?? Renee E.Stagg


response to renee stagg 24.Aug.2004 04:25

costco employee

renee, i'm curious to know the nature of your injury as well as your performance and attendance histories. i've seen many a case where employees who consistently do not meet the expectations of their position become injured and go out on workman's comp. as you know, costco has a thick employee handbook that is issued every 3-4 years. within the pages of the handbook are a breadth of policies you promise to adhere to when you sign the new agreement paperwork, and they are then armed with MANY ways to handle problem employees and discipline them accordingly with counseling notices, suspension of pay and work, demotions, and termination of employment. if you had an A record, my sympathies go out to you. they fade away for the C-, D and F employees, however. best of luck to you.

jealous 25.Sep.2004 12:13

fortunate one

I think the people that talk bad about COSTCO are just jealous because they don't work there ,sorry about that

Renee: Workman Comp. 17.Jul.2005 13:35


Renee I have been hurt on the job it wasn't at costco. I was a exotic dancer and I got vocational rehabilitation. And the company I worked for paid for my school. Because I was not able to continue my work, knee surgery, when the employer could not find another position. So I am a little confused how is it that i could get all this from a strip club. And you are not from a great company like costco. Since I am a member there also, is there more to your story? That can spell this out for me.

im leaving costco 21.Jan.2006 21:38

jay smith

i worked for kroger company for 19 years. i was at a stand still. i got an chance to work at costco, i jumped to make more money doing the same thing. the company in it self is great, i love how it helps people, always giving to make this world a better place. i strugled to stay, to make my place in the company. working hard, being honest, taking care of members. i was struck very quickly with an inner company circles. very much uncaring of other employees, taking care of those who they thought are worthey. when trying to get through employee diffrences i was told that i had a problem and i needed help. i was going through some hard times, so i decieded that i was the problem. i went to a social worker through the company, and talked and worked through my thoughts. im not the problem and the other employes have confermed that there are big managment problems. im sad, that once again, i see a good company going bad through inner circles. im going back to kroger, im paid less, but respected more. i would really like jim senigal to take a closer look at his stores and not make announcements when there will be walkes. see how it really runs, not how you want to see it ran.